What is the difference between "Limited Benefits" Health Coverage and Health "Insurance"? ?

Question

My health coverage plan adamantly states that it is not "insurance", it is a "limited health benefits" plan. Is there a legal reason why they choose these words instead of insurance, or is there an actual difference? More importantly, if I have "limited health benefits" instead of "insurance", am i getting royally screwed?

Answer 1

Limited health benefits is usually the terms used for a discount plan. There are actually no benefits paid, only a list of providers that will offer a discount for services for members. These are usually a waste of money because the providers are few and far between and those listed are sometimes not really part of the plan.

Answer 2

Limited benefit plans have a fee schedule for services performed. Example: $750 Daily Hospital Benefit, $750 Intensive Care, $75 Doctor Office Visit, $150 Emergency Room, etc...

It doesn't matter what the actual bill is, this is what they pay. It may work out for minor stuff, but never for a serious illness or injury.

Don

http://mtnhealthinsurance.com

Answer 3

Insurance is regulated, and governed, in each state.  It's guaranteed, by the state.  

If it's a "plan", there are no guarantees, and no regulations.  They can lie out their ears to you, and you can't do a thing about it.  

You are probably going to get screwed.  "Limited health benefits" can mean whatever they want it to - it's not regulated.  It can mean, we'll pay $100 a year.  It can mean, we won't pay anything.

Even if they pay, say, $1,000 towards any surgery, well, if you have an appendix out, you'll still end up with $14,000 you'll have to pay yourself.  

That's the main difference between "plans" and "insurance".

Answer 4

Yes, you're getting royally screwed.

To be insurance the company must be on the hook to pay out money, sometimes more than it receives in premium. It is a federal regulation that if the plan is not insurance it cannot use the term "insurance". Your plan just takes in money and doesn't offer you anything more than a list of doctors which may or may not really accept the plan and, if they do, may or may not give you a discount.

Good luck trying to get off the plan. A good percentage of complaints against these plans are people trying to disenroll and cancel the credit card or bank withdrawl payment. Also, the application fee is not refundable.